Syed Ahmad Helmy JC:

The plaintiff's claim herein is for declaratory reliefs that the defendant holds 4/10th of the undivided share in the land known as Grant No. 26627 Lot 5128 on trust for the plaintiff and the defendant execute all necessary documents to effectuate the transfer. The material facts in the action herein are as follows:

Sometime in January 1973 the defendant represented to plaintiff that he had an option to purchase 52 acres of land in Johor belonging to a church and approached the plaintiff. Based on the representation the plaintiff paid 10% on behalf of defendant to exercise the option. The defendant was unable to come up with his portion and hence an agreement dated 20 January 1973 (hereinafter referred to as the first agreement) was entered wherein plaintiff was to provide all financial resources to secure the purchase it was a term of the agreement that plaintiff would be entitled to 11/20th and defendant 9/20th undivided shares in the land.

The defendant was unable to come up with the funds (RM125,033.91) to purchase his 9/20th share and hence by virtue of cl. 2 thereof pending payment he confirms and declares holding the 9/20th undivided shares in trust for the plaintiff.

Later, on 25 February 1973 (hereinafter called the second agreement) another agreement was entered into whereby defendant agreed to reduce his shareholding to a 4/10th share by reason of plaintiff's further payment of the earnest monies.

As the defendant again failed to come up with the payment for his share, another agreement dated 27 February 1974 (hereinafter called the third agreement) was entered into whereby the property's sale price was fixed at RM1 million and the parties were given option to purchase the other's share within 30 days, the defendant being given the first right to exercise the option. There was a similar declaration by the defendant that he holds the 4/10th of the undivided shares on trust for the plaintiff until the sum of RM125,033.91 is fully settled by the defendant.

The defendant having failed to exercise the option the plaintiff thereupon exercised the option and forwarded the sum of RM40,000 to defendant's solicitors Messrs. Allen & Gledhill. The defendant refused to honour the agreement and returned the RM40,000.

Against the background aforesaid the plaintiff initiated action in Civil Suit No. 214-74 claiming specific performance of the third agreement.

The plaintiff obtained default judgment which was subsequently set aside by the High Court and upheld by the Court of Appeal. The Court of Appeal directed that the writ be reserved but owing to the failure of the plaintiff to reserve, the writ expired and no further action was taken by the plaintiff. The High Court in setting aside the default judgment also ordered that the Registrar of Titles, Johor do enter a registrar's caveat on the 4/10th of the undivided shares in the said land.

The defendant instituted an ex parteaction in Saman Pemula No. 24-1070-1996 and obtained an order to set aside the registrar's caveat lodged on the land and for a declaration that he is the beneficial owner.

The plaintiff filed in an application to intervene and the High Court allowed the plaintiff to intervene but refused to set aside the declaratory order as to the defendants beneficial ownership over the land obtained ex parte. Upon appeal, the Court of Appeal set aside the declaratory order on the ground that the High Court had no power to grant the declaration sought on an ex partebasis but it would appear the Court of Appeal did not go into the merits as to the question of beneficial ownership.

In the light of the Court of Appeal decision the parties herein proceeded with the present application for adjudication on its merits.

The issue for determination in this action is whether an express trust in favour of plaintiff has been created by the terms of the agreements aforesaid in respect of the 4/10th undivided share in the subject property known as Lot 5128.

Th